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Will Electric Cars Take Off In India?

Mr. C.S. Sudheer | Updated On Saturday, February 16,2019, 04:31 PM

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India is under attack. No, Pakistan is not attacking India. We are being attacked by a powerful enemy called Air Pollution. Take a look at our capital city, New Delhi. The air in Delhi is filled with fine particulate matter. PM2.5 is thirty times smaller than the width of a human hair and can easily enter your lungs and bloodstream.

Exposure to particulate matter can lead to respiratory disorders, asthma and heart diseases. In a recent Cricket Test Match in Delhi, Sri Lankan players were forced to wear gas masks on the pitch. Need I say more?

Studies have shown that diesel cars are more polluting than petrol cars. Not to say petrol cars are innocent. In the midst of all this a solution emerges. Can electric vehicles be the solution to air pollution in India?

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Will Electric Cars Take Off In India?

Electric cars run on an electric motor powered by electricity from batteries or fuel cells. The electric motor is powered by a rechargeable battery, that can be recharged by plugging in. Electric cars are eco-friendly and do not emit toxic gas or smoke. Electric vehicles not only reduce air pollution but also noise pollution, as they are much quieter than petrol or diesel cars.

India wants only electric cars to run on its roads by 2030. The Government is real serious on this. Just take a look at the Rs 1,120 Crore contract awarded by the State-owned Energy Efficiency Services Ltd (EESL), to Tata Motors to supply 10,000 electric cars. These electric cars will replace the petrol and diesel cars used by the Government and its agencies, which are close to 5 Lakh cars. This shows the Government wants to reduce air pollution and oil imports in India.

1. Why electric cars?

A survey by the World Health Organization has named 6 Indian cities including New Delhi, as among the 15 most polluted cities in the World. Don't you think something needs to be done about this? Electric vehicles are quiet and quick with no tailpipe emissions. This helps combat global warming. Petrol and diesel cars emit poisonous carbon monoxide and nitrogen oxides.

They also emit life-threatening greenhouse gases, which result in soaring temperatures and global warming. Global warming heats up the Earth's and Ocean surfaces, which could melt ice glaciers in Antarctica. The sea level would rise, sinking coastal cities like Mumbai in India, and New York in USA and some other coastal cities.

Electric cars reduce your medical bills. They cut down air pollution which means less diseases like asthma, heart ailments and even lung cancer. Electric cars are more expensive than petrol or diesel cars, but in the long run they are a cost saver. Electric cars run on electricity which is cheaper than petrol/diesel and require less maintenance.

2. How electric vehicles can take off in India?

Maruti Suzuki has a market share of over 50% and dominates the passenger car market in India. Maruti Suzuki will soon manufacture and sell electric cars in India. If the manufacturer of one in every two passenger vehicles manufactures and sells electric cars, imagine what it can do to electric car manufacturing in India.

The Union Government, Road Transport and Highways Minister Nitin Gadkari, has said that the Government will do its best to disincentivise production of petrol and diesel vehicles in India. The Government has set an ambitious target of having only electric cars by 2030. Nitin Gadkari has warned automakers that he could even force them to meet the target. Currently electric vehicles fall in the 12% GST slab and are taxed at 12%, compared to 28% for petrol and diesel vehicles.

The focus is shifting to battery manufacturers, which are at the heart of electric vehicle manufacturing in India. Honda may set up a lithium ion battery plant in India. Suzuki has also decided to join with Toshiba Corp. and Denso Corp. in Gujarat to set up a lithium ion battery plant. Land will be available at cheaper rates to charging stations and battery swapping kiosks. Battery swapping increases the limited range of electric cars. You go to a battery swapping station and swap/exchange your depleted battery, with a fully charged one in minutes.

The Andhra Pradesh Government offers special incentives to battery manufacturing, to draw battery manufacturers to India. New Delhi offers tax holidays/waivers to battery manufacturers and land at subsidized rates. Indian Oil Corporation has opened India's first electric charging station in Nagpur, in partnership with cab aggregator Ola.

If India achieves its target of only electric vehicles by the year 2030, it could save a massive Rs 20 Lakh crore in reduced oil imports. India will also reduce carbon production by over 1 gigatonne, saving the earth from global warming. Be Wise, Get Rich.

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Mr. C.S. Sudheer

Mr. C S Sudheer is the founder and CEO of IndianMoney.com – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.